Amazon’s Goodreads Purchase Scuttled Apple Partnership

Amazon.com’s announcement last month that it was purchasing book-recommendation site Goodreads did more than land the e-commerce giant a social-networking service. It also thwarted a possible partnership between the reading social network and Apple.

Over the past year, Apple and Goodreads had begun discussing integrating Goodreads’ service, which allows users to share and rate what they are reading, into Apple’s iBookstore, which sells digital books, according to people familiar with the matter.

Goodreads had proposed its reviews and ratings appear within iTunes when users searched for a title, one of the people said. ITunes has already integrated Rotten Tomatoes movie ratings in such a way. Apple was entertaining the idea, but talks didn’t progress much, two of the people said.

Around March, Apple pinged Goodreads to move forward with the talks, these people said. ITunes officials were perplexed when Goodreads executives went quiet, two of the people said.

During that period, Goodreads had cozied up to Amazon, which expressed interest in buying the company. Amazon insisted Goodreads cease talking to others while a deal was done, the people said. Amazon, which had been laboring to build its own social-networking service, purchased Goodreads for what could be more than $200 million if it meets performance targets.

Around that time, a different person at Apple not involved in the iBookstore talks reached out to Goodreads to ask whether it was interested in exploring other options; it’s unclear what those options included. Goodreads declined.

The Goodreads situation illustrates how Amazon and Apple are vying to be the place where users buy all their digital goods. Amazon has recently gained share in the digital-music download business, which remains dominated by iTunes. The stakes are getting higher as the digital books and media businesses grow and become increasingly important features for tablet buyers.

Whether Apple is now seeking to add more review content to its iBookstore through others or on its own remains unclear.